In mid-February, the Roy Morgan Business Confidence Index remained stable at 108.5, reflecting a modest increase of 0.3 points from January, concurrent with the Reserve Bank’s first interest rate cut in over four years, which reduced the OCR by 0.25% to 4.1%.
The business sector has exhibited remarkable resilience, with the Business Confidence Index remaining above 105 for five consecutive months—the longest stretch since the pandemic-induced economic boost in July 2021.
“Business confidence was virtually unchanged at 108.5 in February and is now at its highest since the election of the incumbent Albanese government in May 2022,” said Michele Levine (pictured), CEO of Roy Morgan.
The stable business confidence aligns with a resurgence in consumer sentiment, which climbed by 4% in March from 92.2 to 95.9, reflecting a broader uplift in overall sentiment.
February’s business confidence showed significant regional variations.
Queensland and New South Wales experienced robust gains, aligning with the national average.
Remarkably, Tasmania’s confidence surged by 27.3 points from the previous year, and Western Australia also saw a notable increase, possibly influenced by the recent state election and the re-election of the ALP government.
In terms of industry performance, the mining sector led at 132.6, followed closely by financial and insurance services.
Conversely, the wholesale trade and agriculture sectors lagged behind, highlighting the uneven impact of economic conditions across different industries, Roy Morgan reported.
Businesses are increasingly optimistic about investment opportunities, with 43.7% indicating the next 12 months as a favourable time for investment, reflecting a modest improvement.
This optimism extends to the broader economic outlook, with a significant majority expecting improved conditions over the next year.
Despite the general positive sentiment, the long-term view is more cautious, with mixed feelings about the economic prospects over the next five years.
